Taxes in an independent Scotland may have to increase to fund the burgeoning
cost of benefits, a report by a senior economist has warned.

Professor David Bell said economic growth would have to keep pace with the spiralling cost of welfare north of the Border if taxes were not to increase.

The Stirling University academic said politicians arguing for control of welfare to be devolved to Holyrood or total independence have yet to provide a “a clear, costed vision” of how this could be achieved.

His analysis is a blow for SNP ministers who have put Westminster’s controversial welfare reforms at the forefront of their campaign for independence in the hope of attracting poorer Scots.

However, Treasury figures published yesterday showed the cost of the welfare state in Scotland has reached £4,063 per head, almost £400 more than in England.

The report by Prof Bell, who acts as an official adviser to Holyrood’s finance committee, said the number of pensioners in Scotland was expected to increase by 80 per cent between 2010 and 2060.

He said: “Scotland has lower income, more working-age people with no skills, a higher unemployment rate, higher proportions of older people and lone parents in the population and higher levels of disability.

“While supporters of increases in the powers of the Scottish Government, including full independence, have indicated a desire to take greater control over the welfare budget, what has been lacking is a clear, costed vision of what that 'Scottish welfare system' might comprise.

“There are opportunities to improve the operation of the welfare system but there are also constraints which few of the advocates of increased powers seem willing to acknowledge.”

He concluded the cost would have to be met from “the economic activity of the working-age population”, either through consistent growth or tax increases.

Because benefits play a “vital role” in supporting vulnerable households, such as pensioners, he argued that a Scottish Parliament with control over welfare would struggle to make major changes to the existing system.

The Treasury said £21 billion a year is spent on ‘social protection’ in Scotland, a total that has increased by a quarter in only four years.

Around 16.8 per cent of the Scottish population receives benefits for being out of work compared to 14.8 per cent for adults across the UK.

Murdo Fraser, the Tory convener of Holyrood's economy committee, said: “It was only this month John Swinney said he didn't foresee any tax rises if Scotland was to separate from the rest of the UK.

“And just as those words were leaving his lips, a renowned expert in economics was reaching a vastly different conclusion. This Scottish government cannot keep promising the world and expecting the public to simply swallow it."